TN govt steps in to settle Rs 143 crore dues to farmers after NCCF delays payment

Chennai, June 24 In a major relief to thousands of farmers affected by delayed payments, the Tamil Nadu government has stepped in to disburse Rs 143 crore in pending dues following procurement lapses by the National Cooperative Consumers’ Federation (NCCF), a central agency functioning under the Union Department of Consumer Affairs.

The NCCF had halted paddy procurement operations in eight non-delta districts -- Tiruvannamalai, Kancheepuram, Tirunelveli, Ramanathapuram, Vellore, Ranipet, Villupuram, and Thiruvallur -- amid peak harvesting, triggering protests from farmers who were left unpaid.

In response, the state has directed the Tamil Nadu Civil Supplies Corporation (TNCSC) to immediately settle the dues to approximately 5,000 affected farmers within the next 7 to 10 days. The amount will later be recovered from the NCCF, officials confirmed.

The decision follows a formal request from the Union Government urging Tamil Nadu to intervene and resolve the crisis caused by the NCCF’s operational failures.

Under an earlier agreement, the NCCF had been authorised to procure paddy from the eight districts at the Minimum Support Price (MSP) and convert the paddy into rice for delivery to TNCSC.

TNCSC, in turn, would pay the NCCF upon receipt of the rice. However, officials revealed that while NCCF procured approximately 3.6 lakh metric tonnes (MT) of paddy from nearly 24,000 farmers -- worth Rs 810 crore -- it managed to process and deliver less than 40 per cent of the stock.

This disruption in the conversion process caused a cascading delay in the payment cycle.

Much of the procured paddy reportedly remained stored in open Direct Procurement Centres (DPCs), leading to excessive moisture accumulation and spoilage during rains. The deterioration in stock quality further complicated the processing and payment procedures, ultimately forcing the NCCF to suspend procurement activities in the eight districts.

In light of the ongoing issues, TNCSC has decided to assume direct control of paddy procurement operations in the affected districts, ending NCCF’s role in the process.

Officials of the Tamil Nadu agriculture department said that TNCSC and NCCF have jointly disbursed Rs 9,396 crore to 4.71 lakh farmers, and the remaining Rs 143 crore will be paid within 10 days.

Despite the challenges, paddy procurement figures in Tamil Nadu have shown a significant year-on-year increase.

During the current Kharif Marketing Season (2025-26), over 39 lakh MT of paddy has been procured, compared to 29 lakh MT during the same period last year.

Officials expect this year’s total procurement to exceed last year’s by 8 to 9 lakh MT.

The swift intervention by the state government is expected to restore confidence among farmers and ensure smoother procurement operations in the upcoming months.

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